Our thinking, exposed.
At ALG, we have the benefit of exposure to a wide range of vehicles in just about every segment on the market. This also means we experience a vast array of in-car technology, which in the past decade has moved from including things like CD players and navigation to an endless range of safety, comfort and entertainment options.
In this new blog series, we’ll explore some of the ways that automotive brands manage to integrate and execute these increasingly complex features. We’ll show you the best practices that make the cabin experience better, and we’ll politely point out some of the ways that current executions could improve.
The first feature we’ll tackle is one that is becoming de rigeur for the latest generation of vehicles, as more and more drivers carry their music with them on a mobile device. No longer just for carrying on a hands-free phone conversation, Bluetooth lets you stream media stored on your device or straight from the Internet, through apps like Pandora and Spotify.
Bluetooth often integrates with vehicles through increasingly complex infotainment systems, and we’ll certainly be offering commentary on the variety of screens, knobs and touchpads that you’ll find in automotive cabins these days. But for our first look at in-car technology, we’ll focus solely on the execution of Bluetooth.
Make connecting easy
The initial connection should be a cinch, not only for a driver when they get in their new car for the first time. Other passengers will often want to connect to the system to share their own media on a road trip. Make it easy to find the right command (hint: through the “phone” menu), and don’t make us type in a code. We’re all just going to use “0000″, so what security is this really providing? And make it pop up on the user’s phone as something intuitive, like your brand name.
And don’t connect via voice commands. We had one system that did this recently that drove us all bonkers, since it was impossible to use the touch screen to connect. Thankfully that system is on its way out.
Use your display!
If you have a big beautiful screen, use it. We’ve definitely seen systems that sequester the song information in a tiny little corner or restrict it to an 8-character line of text. Be proud; display it boldly.
An even bigger and more flabbergasting demerit is issued to those systems that don’t display song info at all. Some systems merely tell you you’re streaming via Bluetooth. Yes, I knew that, but what I don’t recall is the name of this song buried at the bottom of my playlist that I haven’t heard in ages. Yes, I want to know what it’s called, and I also want to know what album it’s from.
Another strange but common execution is the mis-use of the instrument cluster display. Many brands are now giving us lovely full-color screens next to the speedo and tach. But some of them, despite being able to show streaming music data on the infotainment screen, can’t get that text to the cluster. Puzzling, but all too common. If you have space, display the album artwork. If the song is missing the artwork, move the text over so it doesn’t rub that fact in the driver’s face.
One of the most salient differences between systems is what happens when you get back in the car. If you left your music streaming when you got out, odds are you’ll want to continue doing so on your next drive. Some systems reconnect automatically. Some don’t. Others take so long to reconnect that you’re ten blocks away by the time you hear anything.
Quick reconnection can be a technical challenge, but it’s an important one. Otherwise the system will have to automatically switch the source to radio, in order to avoid the dreaded dead air, which then necessitates extra button presses to get back to square one.
One brand has gotten much better with reconnection times, but its systems default to an input selection screen–a legacy of when things weren’t so quick–which requires that you scroll down to select your phone before it takes you to the main music display, which should be there from the start.
Bluetooth is a feature that has quickly gained prominence, and is now being sought out by many used buyers. It may not necessarily raise the value of a car a great deal, but its absence on cars will grow increasingly conspicuous. And the quality of execution will inform consumers’ impressions of a brand, which means it’s definitely worthwhile ensuring that the details are done right.
Ferrari recently announced that it had strengthened its bottom line by actually cutting production. The Italian exotic brand sold 5.4% fewer cars in 2013 than it had the year before–intentionally–yet its net went up by the same percentage.
Ferrari is clearly a special case, with its total volume of 7,000 cars worldwide making it one of the most exclusive marques on the planet. But the extremes can often elucidate basic phenomena, and in this case it shows how scarcity can elevate perceived value.
We’ve written previously about the drive for market share and the impact of adding incentives when those goals come up short. However, the hidden impact is the effect of used supply when it comes to resale values; it is one of the primary drivers of our residual value analytical model. If there’s plenty of demand for a brand in the marketplace, then a naturally high level of sales wouldn’t result in a later glut on the used market. But if sales are artificially inflated with incentives, it creates a one-two punch of higher used supply in the pipeline that is also composed of vehicles that began their depreciation from a lower starting point.
Nissan is clearly not going to restrict its volume to a level at which buyers consider it a coveted badge similar to Ferrari. But the company can allow volumes for the Altima to follow the natural demand patterns of the market, rather than pushing incentives to support the brand’s goal of doubling US sales by 2017, which we addressed last year. This can have a deep impact on the appropriate pricing level within buyers’ minds in both the new and used markets–Ferrari has certainly illustrated this–which has significant long-term implications for the brand.
This post expands on some principles examined in previous posts, including hard adds versus soft adds and the residual percentage calculation. If you haven’t read those, it may be helpful to review them first.
As we explored previously, soft add calculations are an integral part of our residual forecast. They help inflate the denominator of the residual calculation to account for equipment that’s not already baked in–”non-typical” equipment with a take rate under 50%. If a buyer selects a whole array of equipment that inflates the MSRP but is not expected to retain much in the used market, this factor helps to control for the fact that the residual percentage will still be applied to the inflated MSRP.
BMW debuted two new diesel models at the Chicago Auto Show, bringing the total lineup to six offerings from the Bavarian brand that rely on compression ignition. Having driven the 535d for the past week, it’s clear to me that BMW has put forth a rock-solid case for buying the diesel over the gas model, and I presume the same will be true of the 7 and X3 when the 740Ld xDrive and X3 xDrive28d hit the market. This experience behind the wheel combines with the relatively tight supply picture to create an environment of high retention for these vehicles in the used market. (more…)
BMW has long been known for identifiable brand characteristics, with its twin-kidney grille and “Hofmeister kink” consistently complementing the propeller roundel since the 1960s. And while BMW’s “Angel Eyes” LED accents emphasized another prominent brand signature, the dual circular headlights, LED lighting effects were in recent years more identified with Audi, which has become somewhat of a styling pioneer. Not to be outdone, Mercedes has recently stepped up its design game, with lauded looks coming in the form of the CLS and CLA “4-door coupes”.
One pitfall of pioneering design, though, is the impulse to fall back on those elements that have achieved market success. Audi just introduced the A3 sedan at the Detroit Auto Show, and it’s another fabulous-looking car from VW’s premium brand. But one may be hard-pressed to tell it apart from its A4 big brother, or even the A6 for that matter. See if you can figure out which is which below. (more…)
The ALG staff has enjoyed a few opportunities to test the Wrangler’s mettle in challenging settings, and it’s been a blast to use. One staff member had the following comments on his experience:
“I went off-roading on West Camino Cielo. I ran through a progression of 2WD, 4WD-high, 4WD-low and locked on a very steep, loose grade. It was awesome to see it go from stuck, to stuttering, to confident, to bored. All levels are easy to engage and make a noticeable difference in traction.”
He also found it very simple to remove the roof and doors, adding, “Turning this into an open off-road machine was one of my favorite experiences in an ALG Fleet car so far.”
At ALG, high-tech equipment has typically been valued as a highly depreciating asset on a vehicle, because new buyers are significantly more concerned with having the latest and greatest than used buyers. However, key announcements at this year’s Connected Car Expo at the 2014 LA Auto Show could change how we value the rapid increase of in-vehicle technology.
In an interview with Automotive News, former GM CEO Dan Akerson said that “connectivity has become a top five purchase consideration for buyers in their teens through early 40s.” As a way to address the needs for this large section of consumers, GM and others are seeking ways to satisfy not only this hunger to connect, but also some practical challenges for which solutions are long overdue. (more…)